Insights from BCC Research

Smart Card Technology Gets Under Our Skin

Especially in Sweden, where Near Field Communication (NFC) figures in one Swedish rail company's biometric program to make ticket-tearing a quaint notion of the past. Instead of taking passenger tickets, conductors scan microchips embedded under commuters' skin.

State-owned SJ Rail is the first travel company in the world that offers commuters the option of implanting a biometric chip into their hand. The chip features the same technology as Oyster cards and contactless bank cards.

The innovative program underscores the fact that smart card technologies increasingly comprise an integral part of the global economy. The average end-user, whether consumer, business or government, utilizes smart card technologies several times per day for financial transactions, authentication to services or access control. Near Field Communication (NFC) is being embedded in nearly every mobile device, resulting in the rapid growth of mobile devices substituting for plastic cards.

“As north Europe’s largest train operator and one of the top 10 digital companies in Sweden, we are at the forefront of digital developments," says a spokesperson for SJ Rail, the state-owned railway that rolled-out the program last June. "This is an interesting project that gives us ideas of how to enhance the digital customer experience even further.”

The chip isn't available to the public just yet. About 2,000 Swedes, most of whom are employed in the tech sector, have had the surgical implant so far. The company anticipates about 200 people to adopt the microchip method, but users must be enrolled as a loyalty program member to access the service.

SJ Rail launched the program to meet customer demand, according to the Independent. It’s quicker to scan a microchip than a travel card, which saves the train crew time, but the program's key benefit is that it puts the train company at the forefront of digital technology.

Customers log onto the railway's website or mobile app, buy their tickets referencing their membership number, which is linked to their chip, explains the DailyTech. The train conductor can then read the chip with a smartphone to confirm passengers have paid for their journey.

Microchip implants are not new in Sweden, and an estimated 20,000 people already have them, using the devices to swipe in and out of the office, and even pay for food, the Daily Mail notes.

In terms of digital payments, Sweden’s consumers conduct only 2 percent of all transactions with cash, according to Business Insider. The remainder use credit cards and various forms of electronic mobile payments.

According to BCC Research, growing demand for mobile services, an increase in initiatives for automated healthcare systems, government initiatives for national ID cards, and an increased effort in compliance are fueling the global demand for smart cards. Or, if you prefer, chips embedded under your skin.

Smart Card Technologies and Global Markets reports that continued waves of new smart phones that include emerging 5G device technology, Internet of Things deployments, and the continued adoption by corporate and government agencies to improve security and flexibility should push the market at an 8.7% CAGR.

To learn more about the fast-growing smart card industry, download the free report overview.